$SPX

By Lawrence G. McMillan

From a broad viewpoint, using our indicators, the picture is actually fairly bearish except for one major thing: the price chart of the Standard & Poors 500 Index ($SPX) has not broken down. A decline below 1780 would also interrupt the bullish pattern that currently exists of higher highs and higher lows on the $SPX chart.

By Lawrence G. McMillan

The feature article discusses various trading strategies and systems around Thanks-giving Day.  The article culminates with the recommendation that we already made in previous Hotlines: to buy “the market” at the close of trading on the Wednesday before Thanksgiving.  The article provides some new ways of looking at the entire trade, including holding longer than we have in the past.

By Lawrence G. McMillan

Price action -- via the $SPX chart -- and volatility have remained bullish. We have often said that price is the main indicator and that has certainly been the case this time.

Equity-only put-call ratios turned bearish a little more than a week ago and remain on sell signals.

Market breadth has generally been weaker than the market until very recently, but now the breadth indicators are rolling back over to buy signals.

By Lawrence G. McMillan

There are a number of systems and indicators that we follow – some with frequent signals, others with as few as annual signals – that are worth noting, as the broad stock market makes new all-time highs.  Some of these are related to market prediction, while others have nothing to do with stocks.  So, in that sense, this article is a bit of a potpourri.  

By Lawrence G. McMillan

The stock market has had plenty of reasons to weaken, yet it can barely go down at all.  This is a very powerful market.

$SPX has support at 1730, 1750, 1770, and now may have established another support area at yesterday's lows near 1780.

Equity-only put-call ratios generated sell signals this week.

Market breadth continues to be relatively weak.  As a result, the breadth indicators generated fresh sell signals recently.

By Lawrence G. McMillan

$SPX broke out to new highs, and that is bullish, but severe overbought conditions still exist.

$SPX has support at 1750-1770, the range it traded in for a couple of weeks.  Also, there is further support at 1730.      Equity-only put-call ratios are on buy signals, but are in extremely overbought territory.

Breadth has been relatively weak for some time now. For example, $SPX is making new highs, but cumulative breadth is not. Thus, a negative divergence has arisen.

By Lawrence G. McMillan

Wednesday was a very powerful, bullish day.  It mirrored the action of last Friday: S&P futures were trading down sharply before the NYSE open, but once that market opened, it was off to the races on the upside all day long.  Last Friday was a 30-point reversal day from low to high.  Yesterday was a 24-point upside reversal.  Those are huge moves, especially in light of the fact that actual volatility has been so low lately.

By Lawrence G. McMillan

The broad stock market, as measured by the Standard & Poors 500 Index ($SPX) was seemingly impervious to an increasing overbought condition.  But today after moving to new highs, the buyers finally ran out of gas, and the market reversed downward sharply.  The negative trend should last for at least a short while.

The equity-only put-call ratios have been the lone bullish holdout.  But now, the weighted put-call ratio has given a sell signal.

By Lawrence G. McMillan

The stock market is once again overbought, and we have done more research into what we hope will be effective systems for taking advantage of these conditions.  Most of the article is devoted to creating a trading system around the “modified Bollinger Bands,” but market breadth and volatility are “overbought,” too.  A recommendation is made on page 4.

By Lawrence G. McMillan

Stocks can go down, and it now looks like they will.  The market, as measured by the Standard & Poors 500 Index ($SPX) continued to rise at a dizzying pace until the Fed meeting ended on Wednesday. Now stocks are taking on a more bearish tone.

Typically, the market pulls back to at least the 20-day moving average in these situations, and usually overshoots that target. Currently, that 20-day moving average is at 1725.